Many people think mobile advertising is a huge opportunity in
part because it is the medium where ad spend is lagging the most
behind time spent (see chart at right).

However, it will almost certainly never catch up. But this
doesn't mean it's not a big opportunity.

We recently spoke with Ernie Cormier and Victor Milligan,
CEO and CMO at Nexage, respectively. Nexage is a mobile
advertising exchange; it connects publishers, developers, ad
networks, and real-time ad buyers. It is currently serving 12
billion ad impressions per month and, as such, has a pretty good
view of the industry's development and where it is
heading.

Here's what we learned about why spend won't catch up with
time:

On mobile, as on the web, most people spend a lot of
time doing other things than consuming media, like
communicating (email) or working. TV, radio and newspapers,
meanwhile, are pure media. Ads really only perform well when
they're against media.

The amount of time consumers spend on their phones has
skyrocketed in a very short period. This explains a
good amount of the lag: advertisers are only starting to catch
up with the new usage patterns. Cormier told us that "media ad
share shifts [are] a 'pause-pause-go' sequence where [brands]
pause to ensure the behavioral shift is enduring and take the
the time needed to re-orient their business." Despite 60
percent annual growth in the market, he still believes most
brands are in pause mode.

Importantly, "the competency gap is catching
up," Cormier told us. In other words, advertisers
have a better understanding of how mobile ads work, and what they
can do with them. This is also the sense we got when we
interviewed
the head of mobile at Publicis Groupe.

While inventory is large the biggest issue is properly
matching supply and demand, Cormier said. This is where ad
exchanges like Nexage come in.

With regard to the time spent/ad spend gap on mobile, while it's
important to understand they'll never catch up, it's more
important to understand that the debate is a red
herring: with billions of people soon to carry
smartphones on them 16 hours a day, ad spend doesn't have
to catch up to time spent for mobile advertising to be a huge
opportunity.